March 30, 2010

making the most of failure

Rita McGrath recently wrote on her blog about squandering intelligent failures. Oftentimes, leaders will pretend that mistakes made within an organization are intentional (which doesn’t really fool anyone anyway) or try to hide the fact that a failure occurred. Both of these approaches are unwise and result in a “squandered failure” because they prevent people from learning from the failure. Leaders who operate from traditional mindsets failures have been ingrained with the mindset that failures must be avoided. As McGrath notes, quality techniques such as Six Sigma are predicated on a belief that all variations (i.e., failures) must be eliminated if there is to be quality in the product or service. While this is a noble goal, it also inherently assumes that the manager/leader must always be right whcih leaves no room for mistakes.

The problem with this is that research has demonstrated that organizations learn more from failures than they do from their successes. However, not all failures are necessarily useful to an organization. McGrath reminds us that intelligent failures are:

Carefully planned, so that when things go wrong you know why

Genuinely uncertain, so the outcome cannot be known ahead of time

Modest in scale, so that a catastrophe does not result

Managed quickly, so that not too much time elapses between outcome and interpretation

Familiar enough so that what is learned can inform other parts of the business

Perhaps the most important point in all of this is that organizations should treat uncertain decisions as experiments and accept that failing intelligently can lead to quicker and deeper organizational learning.